Undoubtedly with all the consolidation in this market segment, we will continue to see the direction of the market set by fewer and fewer companies. I know you say the market the largest distributors represent the majority of the revenue for the industry, I am curious as to how much the top 3 distributors (Arrow, Avnet and Future) alone represent?
We can't rule consolidation out when the situation warrants. In my opinion, most of these big companies will like to maintain the level of their revenues even when they are facing challenges that may impact their outputs and the net gains. In order to retain their strength, consolidation and merger could be the next option.
"top 10 distributors will continue to determine the distribution market's direction for the near future." This statement is true but it all depends on how well they can manage what is sustaining them to do what they are doing now and how better they can manage the future challenges.
Avnet and Arrow are going to have an interesting next couple of years. Do they sit back and focus on their current strategies and see what WPG has planned, or will it be too late at that point? Avnet and Arrow are heading in the right direction by diversifying their companies to help grow throughout the market segment. It is possible that WPG could overtake one of them if not both in a few years as a component distributor, but if they continue to diversify themselves they will still be the more powerful companies.
In today's economy and marketplace many people think that M&A is the best possible choice to gain ground and take market shares away from rivals. This might be the case for many situations, but there are other times when just thinking outside the box will make a huge difference.
There's no question there will be further consolidation in the global market--Avnet just announced a European acquisition today. Arrow has recently added to its systems business via acquisition. Future and WPG are not as acquisitive, but their growth has kept pace with the market even w/out acquisition. (As have the catalogs and specialty distributor TTI. ) I tend to think there will be fewer mega-mergers going forward--look for smaller, strategic buys that fill in gaps in regional areas.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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